Canada Now Open to Beef Imports from Argentina

Canada has reopened to Argentine beef for the first time since 2001, when imports were suspended due to outbreaks of foot-and-mouth disease in Argentina.

Argentine beef entering Canada is subject to a 26.5 percent tariff, unless it is imported under the Most Favored Nation quota for 11,803 metric tons (mt) at zero duty. This quota is currently being filled by Uruguayan beef.

As we have previously reported, Argentina’s new administration has removed the 15 percent export tariff and export permits for beef in an effort to enhance the competitiveness of its beef industry. The recent devaluation of the Argentine peso (moving toward 14 pesos/U.S. dollar compared to an average of 9.1 for January through mid-December 2015 – a devaluation of about 35 percent) could also provide a tailwind for Argentina’s beef exports in coming months. However, optimism in Argentina’s beef industry is expected to fuel herd rebuilding, which will likely limit production growth over the next couple of years. So export demand will likely pull more beef out of the domestic market, which absorbed more than 90 percent of Argentine production in 2015, compared to just over 80 percent from 2004 through 2009.

Prior to the recent economic and political changes, USDA estimated Argentina’s 2016 beef production at 2.68 million mt, down 2 percent from 2015. If they accounted for 15 percent of production, exports could hypothetically exceed 280,000 mt in product weight, up from about 160,000 mt in 2015. China, the European Union, Chile, and Israel are likely to remain the top destinations for Argentine beef.